Shattuck said the delay for the conditional guarantee, which is considered crucial to financing the nuclear unit, has begun to “affect the prospects for the Calvert Cliffs project.” And the wait has prompted the Baltimore company to roll back its spending on the project, Shattuck said, during a conference call announcing its second-quarter earnings.

While Shattuck said Constellation and Electricite de France, the company’s partner in the Unistar Nuclear Energy joint venture, are committed to pursuing the project, he warned that time is running out. Executives said they had expected a decision by the U.S. Department of Energy earlier this year.

“We can’t keep going at the rate that we’re going without clarity on the loan guarantee,” he added. “Time is a little bit of our enemy at this point.”

Constellation and EDF have spent $600 million on the proposed nuclear reactor in Southern Maryland, and Shattuck said Constellation plans to fund Unistar for the rest of the year. But Unistar has cut back on hiring contractors and supply chain vendors and has stopped filling open positions, he said in an interview.

The reactor’s construction is expected to yield about 2,100 jobs in the first year and up to 7,670 overall, according to a study conducted by Areva, the world’s largest reactor maker, one of two companies designing and building the proposed reactor for Unistar. The plant is expected to create 400 to 700 permanent jobs.

“I think we’ve all been geared toward having a decision before this point in time, frankly,” Shattuck said. “There is some level of frustration that we haven’t had an answer at this point.”

At the moment, the Energy Department has only enough loan authority to offer one project a conditional guarantee.

Michael Wallace, chairman of Unistar and vice chairman of Constellation, said Unistar’s application is further along in the process than competing projects.

The Maryland project is at the final review stage before the credit board that makes loan guarantee recommendations to the energy secretary, Wallace said.

Ebony Meeks, a spokeswoman for the Department of Energy, said the agency understands Constellation’s frustration, but “our main priority is to be a steward of taxpayer dollars.”

“These loan guarantees are very complex, and we need to make sure they are reviewed thoroughly,” she said.

This year, President Barack Obama announced a conditional loan guarantee for a nuclear project in Georgia, which would be the first project of its kind in decades.

Although there are other variables — including the cost of the project and federal policies affecting carbon prices — that Constellation and EDF will have to consider before making a final decision on the project, Shattuck said the loan guarantee approval is an important milestone.

Meanwhile, Constellation reported that its second-quarter profit rose to $72.6 million, or 36 cents per share, compared with $8.1 million, or 4 cents per share, in the corresponding period last year. Last year’s net income was hurt by losses related to shedding some of the company’s businesses.

Excluding accounting changes, discontinued operations and other special items, earnings from continuing operations fell to 71 cents per share, down from $1.08 per share in the same period a year earlier.

Constellation’s regulated utility, Baltimore Gas and Electric, reported net income of 7 cents per share in the quarter, up from 6 cents per share a year ago.

Constellation shares fell $1.63, or 4.7 percent, to close Wednesday at $33.28.

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Baltimore Business Journal – by Scott Dance Staff

sdance@bizjournals.com or (410) 454-0514.
Twitter.com/ssdance

The slots parlor, dubbed Hollywood Casino Perryville, is set to become the first of its kind in the state since the one-armed bandits were legalized in a 2008 referendum.

The casino’s owner, Penn National Gaming, has been working on hiring 350 people to staff the casino. The contract approved Wednesday allows the state to move forward on buying the slot machines that will fill the facility.

Wyomissing, Pa.-based Penn National (NASDAQ: PENN) said last month preparations were moving swiftly enough that the project could open ahead of schedule. It was set to open in the fourth quarter of this year.

The contract was broken up among six contractors, as follows:

• $21.6 million to IGT;

• $12 million to Bally Gaming;

• $9.6 million to Spielo Manufacturing;

• $6.2 million to Aristocrat Technologies;

• $700,000 to Shuffle Master; and,

• $300,000 to KGM Gaming.

The fate of a 4,750-slot machine casino is now in the hands of county Circuit Court Judge Ronald A. Silkworth.

It took nearly two weeks of arguments, reams of documents and hundreds of affidavits for an army of attorneys to make their cases on whether the court should set aside a petition aimed at stopping the casino.

The legal wrangling will either halt or set into motion a referendum on whether to overturn a zoning law that allows a gambling emporium near Arundel Mills mall in Hanover.

Silkworth’s ruling will come no sooner than Friday, when a final document is expected to be filed by attorneys for both sides.

But his ruling is expected to be immediately appealed, since both sides have argued that the integrity of democracy is at stake and the referendum faces an August deadline to be ready for the ballot.

Attorneys for the casino’s developer, The Cordish Cos., sued the county Board of Elections, alleging that the agency overlooked evidence of fraud and capriciously selected which petition signatures to validate.

More than 40,000 people signed the petition to send zoning for the casino at Arundel Mills mall to a referendum this fall. The elections board decided that nearly half of the signatures didn’t meet state and local standards.

But the roughly 23,000 signatures deemed valid still left the coalition opposing the casino more than 4,000 beyond the number needed to trigger a vote.

“So, what you’re trying to show is inconsistency,” Silkworth said during closing arguments in Annapolis on Thursday. “What am I supposed to do with that? Go through 40,000 signatures?”

Cordish attorney Stephen Anthony replied that the court should review enough signatures to decide whether the elections boards acted properly.

The actions “should not only be uniform, they should be right,” Anthony said.

Cordish attorneys have attacked the petition from several legal angles, contesting everything from the order of columns on the petition form to the constitutionality of county voters having a referendum on the zoning law.

Silkworth has been asked to review as many as 9,400 signatures, looking for blurry handwriting, pairs of signatures signed by the same person, missing information, and a dozen more categories of “defective signatures” ferreted out by Cordish reviewers.

Attorneys for the coalition against the casino, which includes resident group StopSlots at Arundel Mills and the Maryland Jockey Club, jumped into the lawsuit this spring and dominated the arguments against Cordish.

Along with the state and county boards of elections, the coalition contends that officials followed the law and it is not the court’s role to redo the agency’s work.

Silenced voices

Before the trial began, Silkworth limited the scope of the trial to reviewing the records of the actions of the county elections board – a decision that led him to rule out testimony from any witnesses, as well as more than 100 affidavits from voters such as James Bull.

The county resident waited for two days at the courthouse hoping to tell the judge how he was duped into signing a petition that he thought would support slot machine gambling.

“Anytime somebody says slots, I say I love slots. Obviously, I said I was for them,” Bull said in an interview this week, recalling his conversation with a petition circulator who knocked on his door. “She said she had a petition and it was for slots. … I was even hesitant because it didn’t say that on there.”

Bull and his son, Steven, said they believed the circulator’s story and didn’t realize they’d signed a petition against slots until they were approached by an attorney from Cordish.

“You feel stupid when you do something like that because you’re not supposed to sign something without knowing what it is,” Bull said.

Bull and his family were so irritated by this that they agreed to wait in the courthouse to testify – even spending his wedding anniversary there – only to be told the judge would not allow any new evidence.

“It (angers) me a little bit because I spent two days down there wanting to be heard, and I was told no.”

Cordish’s attorneys point to Bull’s experience as evidence of fraud that was overlooked by the court.

The anti-casino coalition and the Board of Elections say that it’s impractical for a state agency to review 40,000 conversations between petition signers and circulators and determine who was correct and who lied.

Flawed process?

Even without those conversations, Cordish attorney Tony Herman argued that the inconsistencies in the way elections officials handled the petition is enough for the court to set it aside completely.

“We believe that the process was so flawed, so deficient, that the record reflects … an abject abdication (of responsibility),” Herman said in his closing arguments. “For that alone, it should be set aside.”

Coalition attorneys contended that for every signature casino supporters could get thrown out, the casino opponents could find one that should have been counted – including the invalidated signatures of Annapolis Mayor Joshua Cohen and former state senator Janet Greenip, both of whom had signatures thrown out by the county elections board.

“It is not the court’s role to second-guess the agency,” said Michael Berman, one of the attorneys representing the Maryland Jockey Club and citizens groups. “The job of fact-finding has been delegated to the agency.”

Coalition attorney Bruce Marcus put it more strongly.

“We can’t have people coming into court and accusing elections boards of not doing their jobs,” Marcus said. “It’s like screaming fire in a movie theater. It’s wrong.”

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ecox@capitalgazette.com